GM Running On Fumes: Hits 26-Year Low (And Keeps Falling)

On Friday, GM's stock hit a 26-year low when it slid to $17.38
(and you really don't want to adjust for inflation).

The stock has since perked up on the oil dip, but the "perfect
storm" might be brewing. The US car market is currently down for
the count, and for those still buying cars, words like "Prius"
and "Civic" come to mind, not "Hummer" and "Suburban." Meanwhile,
labor uniions have put even more pressure on GM's strained
financial performance and cash position.

Like Ford and other American car companies, GM has demonstrated a
spectacular ability to get stuck building cars its customers
wanted a few years ago, and is once again scrambling to catch up
with the times. With $27 billion in cash and short-term
investments, GM has some flexibility, but its financial position
is not what would described as strong: the current ratio (current
liabilities less current assets) is now below 1X, meaning that GM
owes more in the near-term than it has on hand, at least as of
the end of December.

A quarter century ago, it would have been unthinkable that GM and
other American car giants might one day be bought by, say,
Chinese or Japanese companies, or go belly up. It doesn't seem so
preposterous anymore.